https://bugs.openldap.org/show_bug.cgi?id=9402
--- Comment #4 from Vincent Danjean vdanjean.ml@free.fr --- (In reply to Howard Chu from comment #3)
The description you linked says this feature matches the values of a DN-valued attribute against all its superiors, all the way up to the root of the DIT.
That means it's used to ascend the DIT hierarchy. It says nothing about behavior with nested groups. If you have an official M$ document defining how it is used with nested groups, please provide a link.
The document talks about "ancestry" and not "superiors". I find https://support.citrix.com/article/CTX237210 that itself refer to https://docs.microsoft.com/en-us/windows/win32/adsi/search-filter-syntax (official MS doc) It is clear in the doc that the traversal is done through the group hierarchy (defined by the matched attribute) and not through the LDAP tree.
Regards, Vincent